Keywords
Summary

Keywords

Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Deduction of input tax - Refund of excess - Refund by the issue of Government bonds - Not permissible

(Council Directive 77/388, Arts 17 and 18(4))

Summary

$$A Member State which provides for the refund of excess VAT by the issue of Government bonds to a category of taxable persons whose tax position is in credit fails to fulfil its obligations under Articles 17 and 18 of Sixth Directive 77/388/EEC on the harmonisation of the laws of the Member States relating to turnover taxes.

The conditions for a refund that a Member State sets under Article 18(4) of the Sixth Directive must enable the taxable person, in appropriate conditions, to recover the entirety of the credit arising from that excess tax, which implies that the refund is carried out within a reasonable period of time by a payment in liquid funds or equivalent means; the method of refund adopted must not, in any event, entail any financial risk for the taxable person.

( see paras 34, 39 and operative part )